The American Hospital Association (AHA) is asking Congress for an additional $25B to help hospitals offset high labor costs, largely incurred by the need to rely on travel nurse staffing firms that charge two to three times pre-pandemic rates. The AHA, along with 200 members of Congress, is urging the Federal Trade Commission to investigate the staffing agencies for anti-competitive activity, although the agency has previously declined to do so.
The Gist: The Department of Health and Human Services (HHS) is now releasing $2B in of provider relief dollars from the CARES Act. Beyond that, after nearly two years and $178B of federal support, hospitals shouldn’t count on additional funds from the government, even as costs of labor and supplies continue to rise.
Instead, we’d expect more scrutiny over how the remaining relief dollars are spent. Federal support during the pandemic has masked structural economic flaws in provider economics, and we expect 2022 will be a year of financial reckoning for many hospitals and health systems.